Navigant Research Blog

Expanding Options of Community Solar

— November 6, 2015

In the United States, community solar (also known as shared solar or solar gardens) has been on the rise and is expected to be a 0.5 GW annual market by 2020, according to GTM Research. Over the next 2 years, community solar deployments are expected to increase sevenfold, with an estimated 399 MW installed cumulatively in 2015 and 2016.

Designed specifically for homes unfit to reap the benefits of rooftop solar, community solar provides an option to renters who would be otherwise unlikely to invest in the high prices of rooftop solar. In a community solar setup, customers lease or own solar panels in a community solar garden. The energy produced is transferred to the utility, which then applies solar credits to the customer’s electric bill on a monthly basis based on the customer’s total share of the solar array. However, even with the growth of community solar gardens and the increase in accessibility for users, the costs remain high and are not always affordable.

Annual U.S. Community Solar Installations, 2010-2020E

Krystal Blog Chart

(Source: GTM Research)

Making Community Solar Affordable for Everyone

GRID Alternatives, a non-profit headquartered in Oakland, California, works locally through 10 regional and affiliate offices in California, Colorado, the New York Tri-State Area, and the Mid-Atlantic, as well as internationally in Nicaragua. Grid Alternatives’ Colorado branch has developed the first solar garden in the United States exclusively for those with low or fixed incomes.

Utilities have partnered with Grid Alternatives’ Colorado for its community solar program, offering community solar to Colorado families at no out-of-pocket cost to the family. Requirements for the program’s participants include having a household income that is at or below 80% of an area’s median income and having residence within a utility service area that currently offers the program. Two solar gardens are listed on the company’s website. The first is a 29 kW array available to members of the Grand Valley Power service territory. The second (which lists panels as currently available) is 75 kW in size and is available to Xcel Energy customers who live in Jefferson County.

Other Opportunities

There are a number of programs that focus on making solar affordable for low-income families, but there is still room for growth in the low-income solar market. Unlike GRID Alternatives, most of these other organizations focus on rooftop solar, not community solar. The Renewable Energy and Electric Vehicle Association, for example, is a do-it-yourself organization that assists members in installing solar panels in an effort to cut the cost of labor. The Citizens Energy Solar Homes Program installs solar arrays on the roofs of low-income families in the Imperial Valley of California. Founded in January 2013, the Solar Homes Program provides the homeowner with a 20-year solar panel lease paid for by Citizens Energy, which, on average, saves the home owner 40%-50% of the cost of their electric bill.

Even with the number of programs that focus on bringing solar to low-income families, there is tremendous room for growth. The question remains if the rise of community solar will translate to an increase in solar opportunities for low-income families.

 

Market Players Split on Energy Efficiency Opt-Out Program Options

— August 31, 2015

Walmart and a group of large energy users within Florida have proposed an opt-out option to Florida’s Energy Efficiency and Conservation Act. The proposal would allow these large companies to opt out of paying the energy conservation charge. This action would separate these payments and the demand-side management programs, which are both part of the Energy Efficiency and Conservation Act. As the Orlando Sentinel reports, Kenneth Baker, a senior manager at Walmart, stated: “We tend to pay into the rebate program … much higher numbers than we get back in rebates. I think that some of the money that we’re now spending on rebates could go towards other energy-efficiency measures.” Walmart is arguing it would have a better impact on energy efficiency measures if it were allowed to take control of these programs—and not be confined by the Energy Efficiency and Conservation Act.

Opt-out options of similar programs have been implemented in other states, with an Opt-Out Eligibility put forth by the utility and approved by the utilities commission. In order to opt out of the program in North Carolina, for example, a company must implement alternative energy efficiency measures.

The states that do not offer self direct and opt-out programs include Alabama, Alaska, California, Connecticut, Delaware, Washington, D.C., Florida, Georgia, and Hawaii. In Texas, clients develop their own energy efficiency plans if desired and are responsible for the financial impact associated with them. While self direct and opt-out programs have been implemented in other states, there is little information on the successes and failures of such programs.

Opposition

According to Energy Manager Today, Duke, Florida Power & Light (FPL), Tampa Electric, and Gulf Power all oppose the proposal. Their arguments against the proposal are increased costs to small businesses and residential customers. All businesses and residents have the potential to benefit from the programs via the lowering of utility rates, which would be limited if the proposal passed. According to the Tampa Bay Times, FPL argued, “The proposals are self-serving and discriminatory because the thresholds would benefit only select customers.” It would be a detriment to small businesses and residential customers to allow Walmart and other large companies to opt-out of energy efficiency programs. There are no regulations stopping large energy users from investing in additional energy efficiency programs on their own.

If the Public Service Commission in Florida agrees to allow Walmart and other large energy clients to opt out, it seems likely they would provide a self direct program as an alternative, which is common in many other states. While the self direct programs require these companies to provide their own energy efficiency programs, this still leaves the issue of higher costs to small businesses and residential clients who do not qualify to opt out.

The commission is waiting for staff recommendations before making its decision, which will most likely happen in September.


 

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